Accuride Corporation Reports Results for 2005; Revenue Increased by 18.6% on a Pro Forma Basis to $1,283.6 Million; Net Income Rises by 276.4% on a Pro Forma Basis to $52.7 Million; Senior Debt Reduced by $155.4 Million
EVANSVILLE, Ind.--Feb. 1, 20066, 2006--Accuride Corporation today announced net sales of $297.7 million for the fourth quarter ended December 31, 2005. This compares to net sales of $138.5 million for the fourth quarter of 2004. For the twelve months ended December 31, 2005, net sales were $1,229.3 million compared to net sales of $494.0 million for the same twelve-month period in 2004. Net income was $14.9 million, or $0.43 per diluted share, for the quarter compared to $5.5 million, or $0.37 per diluted share, for the fourth quarter of 2004. For the twelve months of 2005, net income was $51.2 million, or $1.70 per diluted share, compared to $21.5 million, or $1.41 per diluted share, for the twelve months of 2004. The results reflect continuing strength in the commercial vehicle industry, with Class 5-8 and trailer builds up 14.8% over the prior year, and the acquisition of Transportation Technologies Industries, Inc. ("TTI") on January 31, 2005.Pro Forma Results for the Acquisition of TTI
The Company's net sales were $297.7 million for the fourth quarter of 2005 compared to pro forma net sales of $291.5 million for the fourth quarter in the prior year, an increase of 2.1%. For the twelve months ended December 31, 2005, pro forma net sales were $1,283.6 million compared to $1,082.3 million for the same period in 2004, an increase of 18.6%.
Adjusted EBITDA was $47.4 million for the fourth quarter of 2005 compared to pro forma Adjusted EBITDA of $39.3 million for the prior year, an increase of 20.6%. For the twelve months ended December 31, 2005, pro forma Adjusted EBITDA was $202.5 million compared to $159.6 million for the same period in 2004, an increase of 26.9%. The purpose and reconciliation of Adjusted EBITDA for the Company to the most directly comparable GAAP measure is set forth in the accompanying schedules.
Net income was $14.9 million for the fourth quarter of 2005 compared to the pro forma net loss of ($4.1) million for the fourth quarter of 2004. For the twelve months of 2005, pro forma net income was $52.7 million or $1.71 per diluted share compared to $14.0 million or $0.61 per diluted share for the twelve months of 2004, an increase of 276.4%. Pro forma net income for 2005 includes pre-tax costs of $20.0 million in refinancing costs and loss on extinguishment of debt and $2.6 million in other non-operating/non-recurring items. The earnings per share impact of these items in 2005 was $0.47 per diluted share. Pro forma net income for 2004 includes pre-tax costs of $11.3 million in non-operating/non-recurring items. The earnings per share impact of these items in 2004 was $0.30 per diluted share.
Liquidity and Cash Flow
At December 31, 2005, the Company had $48.4 million of cash and $697.7 million of total debt for net debt of $649.3 million, which declined by $23.3 million in the fourth quarter. The Company's leverage ratio or net debt to pro forma Adjusted EBITDA on December 31, 2005, was 3.2 times, a reduction from approximately 4.3 times immediately following the IPO in April 2005. In the fourth quarter, the Company reduced senior debt by $15.0 million. For the twelve months of 2005, the Company reduced its senior debt by $155.4 million, including $65.8 million of cash from operations and $89.6 million of proceeds from the IPO.
For the fourth quarter of 2005, cash from operating activities was $39.4 million and capital expenditures totaled $18.5 million, producing free cash flow of $20.9 million.
Review and Outlook
"Overall, we were pleased with our 2005 results. We managed the integration of TTI, refinanced our capital structure on very attractive terms and successfully completed our public listing and subsequent secondary offering," said Terry Keating, Accuride's CEO. "Operationally, we have ramped up our production to record levels and have worked with our customers to manage volatile and rising raw material costs. We are enthusiastic about the opportunities we see as we enter 2006."
The Company will conduct a conference call to review its fourth quarter results and preview the upcoming full year 2006 on Thursday, February 16, 2006, at 1:30 p.m. CST. The phone number to access the conference call is (800) 901-5213 in the United States, or (617) 786-2962 internationally, access code 30456686. A replay will be available beginning February 16, 2006, at 3:30 p.m. CST, through February 23, 2006, by calling (888) 286-8010 in the United States, or (617) 801-6888 internationally, access code 94573042. The transcript of the conference call and financial results for the three-month and twelve-month period ended December 31, 2005, will be also archived at http://www.accuridecorp.com.
Accuride Corporation is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco and Brillion. For more information, visit Accuride's website at http://www.accuridecorp.com.
Forward-looking statements
Statements contained in this news release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's expectations, hopes, beliefs and intentions on strategies regarding the future and statements related to the effect of the TTI acquisition on Accuride's future results. It is important to note that the Company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to, the ability to successfully integrate the above described acquisition, market demand in the commercial vehicle industry, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Accuride assumes no obligation to update the information included in this release.
The unaudited pro forma consolidated statement of operations have been adjusted to give effect to acquisition of TTI and related financings as if these events occurred on January 1, 2004 and 2005. The unaudited pro forma financial data is for informational purposes only and do not purport to present what our results of operations and financial condition would have been had the acquisition and related financing actually occurred on these earlier dates, nor do they project our results of operations for any future period or our financial condition in the future. In addition, the pro forma adjustments, as described herein, may differ from preliminary estimates when the respective transactions occur or the purchase accounting analysis is complete.
ACCURIDE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Historical Results
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ------------------------
2004 2004
2005 (Restated)(1) 2005 (Restated)(1)
---------- ------------ ----------- ------------
NET SALES $297,744 $138,513 $1,229,311 $494,008
COST OF GOODS SOLD 248,445 108,172 1,012,578 391,351
---------- ------------ ----------- ------------
GROSS PROFIT 49,299 30,341 216,733 102,657
OPERATING EXPENSES:
Selling, General &
Administrative 15,898 7,003 67,198 25,550
---------- ------------ ----------- ------------
INCOME FROM OPERATIONS 33,401 23,338 149,535 77,107
OTHER INCOME
(EXPENSE):
Interest Income 134 134 556 244
Interest (Expense) (11,637) (9,599) (51,686) (37,089)
Refinancing Costs
and Loss on
Extinguishment of
Debt - - (19,987) -
Equity in Earnings
of Affiliates 77 205 455 646
Other Income, Net 306 1,050 565 108
---------- ------------ ----------- ------------
INCOME BEFORE INCOME
TAXES 22,281 15,128 79,438 41,016
INCOME TAX PROVISION 7,400 9,593 28,209 19,526
---------- ------------ ----------- ------------
NET INCOME $14,881 $5,535 $51,229 $21,490
========== ============ =========== ============
Weighted average
common shares
outstanding - Basic 33,806 14,658 29,500 14,657
Basic income per share $0.44 $0.38 $1.74 $1.47
Weighted average
common shares
outstanding - Diluted 34,448 15,119 30,075 15,224
Diluted income per
share $0.43 $0.37 $1.70 $1.41
Note:
(1) Effective January 1, 2005, the Company changed its inventory
costing method from the last-in, first-out ("LIFO") method to the
first-in, first-out ("FIFO") method at several business units. In
accordance with generally accepted accounting principles ("GAAP"),
the change has been applied by restating the prior period's
consolidated financial statements.
ACCURIDE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Pro Forma Results(2)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ------------------------
2004 2004
2005 (Restated)(1) 2005 (Restated)(1)
---------- ------------ ----------- ------------
NET SALES $297,744 $291,543 $1,283,641 $1,082,348
COST OF GOODS SOLD 248,445 247,197 1,059,742 903,009
---------- ------------ ----------- ------------
GROSS PROFIT 49,299 44,346 223,899 179,339
OPERATING EXPENSES:
Selling, General &
Administrative 15,898 21,356 71,654 79,346
---------- ------------ ----------- ------------
INCOME FROM OPERATIONS 33,401 22,990 152,245 99,993
OTHER INCOME
(EXPENSE):
Interest Income 134 134 556 244
Interest (Expense) (11,637) (15,985) (52,247) (63,924)
Refinancing Costs
and Loss on
Extinguishment of
Debt - - (19,987) -
Equity in Earnings
of Affiliates 77 205 455 646
Other Income, Net 306 1,050 561 108
---------- ------------ ----------- ------------
INCOME BEFORE INCOME
TAXES 22,281 8,394 81,583 37,067
INCOME TAX PROVISION 7,400 12,502 28,916 23,049
---------- ------------ ----------- ------------
NET INCOME (LOSS) $14,881 $(4,108) $52,667 $14,018
========== ============ =========== ============
Weighted average
common shares
outstanding - Basic 33,806 22,623 30,163 22,621
Basic income per share $0.44 $(0.18) $1.75 $0.62
Weighted average
common shares
outstanding - Diluted 34,448 22,623 30,739 22,946
Diluted income per
share $0.43 $(0.18) $1.71 $0.61
Note:
(1) Effective January 1, 2005, the Company changed its inventory
costing method from the last-in, first-out ("LIFO") method to the
first-in, first-out ("FIFO") method at several business units. In
accordance with generally accepted accounting principles ("GAAP"),
the change has been applied by restating the prior period's
consolidated financial statements.
(2) Pro forma results have been adjusted to give effect to the
acquisition of TTI and related financings as if these events
occurred on January 1, 2004 and 2005.
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Historical Results
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ----------------------
2004 2004
2005 (Restated)(1) 2005 (Restated)(1)
---------- ------------ --------- ------------
NET INCOME $14,881 $5,535 $51,229 $21,490
Net Interest Expense 11,503 9,465 71,117 36,845
Income Tax Expense 7,400 9,593 28,209 19,526
Depreciation and
Amortization 12,645 8,502 44,415 28,438
---------- ------------ --------- ------------
EBITDA 46,429 33,095 194,970 106,299
Restructuring, severance
and other charges(3) 1,237 (1,152) 2,610 (319)
Items related to our
credit agreement(4) (306) (1,050) (565) (108)
---------- ------------ --------- ------------
ADJUSTED EBITDA $47,360 $30,893 $197,015 $105,872
========== ============ ========= ============
Pro Forma Results(2)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- ----------------------
2004 2004
2005 (Restated)(1) 2005 (Restated)(1)
---------- ------------ --------- ------------
PRO FORMA NET INCOME
(LOSS) $14,881 $(4,108) $52,667 $14,018
Net Interest Expense 11,503 15,851 71,678 63,680
Income Tax Expense 7,400 12,502 28,916 23,049
Depreciation and
Amortization 12,645 13,305 47,156 47,669
---------- ------------ --------- ------------
PRO FORMA EBITDA 46,429 37,550 200,417 148,416
Restructuring, severance
and other charges(3) 1,237 2,790 2,610 11,319
Items related to our
credit agreement(4) (306) (1,050) (561) (108)
---------- ------------ --------- ------------
PRO FORMA ADJUSTED
EBITDA $47,360 $39,290 $202,466 $159,627
========== ============ ========= ============
Note:
(1) Effective January 1, 2005, the Company changed its inventory
costing method from the last-in, first-out ("LIFO") method to the
first-in, first-out ("FIFO") method at several business units. In
accordance with generally accepted accounting principles ("GAAP"),
the change has been applied by restating the prior period's
consolidated financial statements.
(2) Pro forma results have been adjusted to give effect to the
acquisition of TTI and related financings as if these events
occurred on January 1, 2004 and 2005.
(3) For the three months ended December 31, 2005, Adjusted EBITDA and
pro forma Adjusted EBITDA represent net income before net interest
expense, income tax expense, depreciation and amortization, plus
(i) $0.1 million for fees related to the secondary stock offering
completed in October 2005, (ii) $0.1 million for costs associated
with the business interruption sustained at our facility in
Cuyahoga Falls, OH, (iii) $0.7 million in pension curtailment
costs at our facility in Rockford, IL, and (iv) $0.3 million
related to exiting the tire-mold business at our facility in Erie,
PA. Item (i) affected SG&A. Items (ii), (iii) and (iv) affected
gross profit. For the three months ended December 31, 2004,
Adjusted EBITDA represents net income before net interest expense,
income tax expense, depreciation and amortization, plus (i) ($1.8)
million for the insurance proceeds related to the business
interruption sustained at our facility in Cuyahoga Falls, OH and
(ii) $0.6 million for costs associated with the business
interruption sustained at our facility in Cuyahoga Falls, OH.
Items (i) and (ii) affected gross profit. For the three months
ended December 31, 2004, pro forma Adjusted EBITDA represents net
income (loss) before net interest expense, income tax expense,
depreciation and amortization, plus (i) ($1.8) million for the
insurance proceeds related to the business interruption sustained
at our facility in Cuyahoga Falls, OH, (ii) $0.6 million for costs
associated with the business interruption costs sustained at our
facility in Cuyahoga Falls, OH, (iii) $1.0 million in costs
related to the merger in 2004, (iv) $0.1 million for costs related
to professional fees for the 2001 audit performed in connection
with TTI's proposed public offering, and (v) $2.9 million of TTI's
expenses related to the aborted IPO in 2004. Items (i) and (ii)
affected gross profit. Items (iii), (iv) and (v) affected SG&A.
For the twelve months ended December 31, 2005, Adjusted EBITDA and
pro forma Adjusted EBITDA represent net income before net interest
expense, income tax expense, depreciation and amortization, plus
(i) $1.8 million for costs related to the sale of inventory that
has been adjusted to fair value, (ii) ($1.0) million for the
insurance proceeds related to the business interruption sustained
at our facility in Cuyahoga Falls, OH, (iii) $0.8 million for fees
related to the secondary stock offering completed in October 2005,
(iv) $0.1 million for costs associated with the business
interruption sustained at our facility in Cuyahoga Falls, OH, (v)
$0.7 million in pension related costs at our facility in Rockford,
IL, and (vi) $0.3 million related to exiting the tire-mold
business at our facility in Erie, PA. Item (iii) affected SG&A.
Items (i), (ii), (iv), (v) and (vi) affected gross profit. For the
twelve months ended December 31, 2004, Adjusted EBITDA represents
net income before net interest expense, income tax expense,
depreciation and amortization, plus (i) $1.5 million for costs
associated with the business interruption sustained at our
facility in Cuyahoga Falls, OH and (ii) ($1.8) million for the
insurance proceeds related to the business interruption sustained
at our facility in Cuyahoga Falls, OH. Items (i) and (ii) affected
gross profit. For the twelve months ended December 31, 2004, pro
forma Adjusted EBITDA represents net income before net interest
expense, income tax expense, depreciation and amortization, plus
(i) $1.5 million for costs associated with the business
interruption sustained at our facility in Cuyahoga Falls, OH, (ii)
($1.8) million for the insurance proceeds related to the business
interruption sustained at our facility in Cuyahoga Falls, OH,
(iii) $1.8 million for costs related to the sale of inventory that
has been adjusted to fair value, (iv) $0.4 million for costs
related to professional fees for the 2001 audit performed in
connection with TTI's proposed initial public offering, (v) $2.2
million for costs recorded by TTI related to an impairment loss
for certain assets held for sale below carrying value, (vi) $3.5
million related to severance expense in connection with the
retirement of TTI"s former CEO, (vii) $1.0 million in costs
related to the merger in 2004, and (viii) $2.9 million of TTI's
expenses related to the aborted IPO in 2004. Items (i), (ii) and
(iii) affected gross profit. Items (iv), (v), (vi), (vii) and
(viii) affected SG&A.
(4) Items related to our credit agreement refer to amounts utilized in
the calculation of financial covenants in Accuride's senior credit
facility. For the three months ended December 31, 2005, items
related to our credit agreement consist of foreign currency income
and other income or expenses of $0.3 million. For the three months
ended December 31, 2004, items related to our credit agreement
consist of foreign currency income and other income or expenses of
$1.1 million. For the twelve months ended December 31, 2005, items
related to our credit agreement consist of foreign currency income
and other income or expenses of $0.6 million. For the twelve
months ended December 31, 2004, items related to our credit
agreement consist of foreign currency income and other income or
expenses of $0.1 million.
Adjusted EBITDA is not intended to represent cash flow as defined by generally accepted accounting principles ("GAAP") and should not be considered as an indicator of cash flow from operations. Adjusted EBITDA represents net income before net interest expense, income tax (expense) benefit, depreciation and amortization plus non-recurring items. However, other companies may calculate Adjusted EBITDA differently. Accuride has included information concerning Adjusted EBITDA in this press release because Accuride's management and our board of directors use it as a measure of our performance to internal business plans to which a significant portion of management incentive programs are based. In addition, future investment and capital allocation decisions are based on Adjusted EBITDA. Investors and industry analysts use Adjusted EBITDA to measure the Company's performance to historic results and to the Company's peer group. The Company has historically provided the measure in previous press releases and believes it provides transparency and continuity to investors for comparable purposes. Certain financial covenants in our borrowing arrangements are tied to similar measures.
ACCURIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
(THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
December 31, December 31,
ASSETS 2005 2004
(Restated)(1)
------------- -------------
CURRENT ASSETS
Cash and cash equivalents $48,415 $71,843
Customer and other receivables, net 141,921 59,075
Inventories, net 118,896 45,443
Supplies 17,426 13,027
Other current assets 25,599 8,520
------------- -------------
TOTAL CURRENT ASSETS 352,257 197,908
PROPERTY, PLANT AND EQUIPMENT, NET 317,972 205,369
Goodwill and other assets 544,421 160,020
------------- -------------
TOTAL $1,214,650 $563,297
============= =============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $114,990 $54,952
Current portion of long-term debt - 1,900
Other current liabilities 81,704 35,269
------------- -------------
TOTAL CURRENT LIABILITIES 196,694 92,121
LONG-TERM DEBT, less current portion 697,725 486,780
OTHER LIABILITIES 144,488 30,177
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 175,743 (45,781)
------------- -------------
TOTAL $1,214,650 $563,297
============= =============
Note:
(1) Effective January 1, 2005, the Company changed its inventory
costing method from the last-in, first-out ("LIFO") method to the
first-in, first-out ("FIFO") method at several business units. In
accordance with generally accepted accounting principles ("GAAP"),
the change has been applied by restating the prior period's
consolidated financial statements.